Personally, I have no qualms neutering any untagged/unchipped cats that start hanging around. At best it's providing a community service. At worst, I'm encroaching on some unknown neighbor's "freedom" to let their pets run wild and free. But mostly it's because it helps keep my inside cats calmer.
Larry looks like he's doing ok. I wouldn't have any immediate concerns about his diet.
Edit: is that a bed of catnip/cat mint?